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2013 (6) TMI 776 - GUJARAT HIGH COURTAddition u/s 14A - Held that:- When the very basis for employing Section 14A of the Act on factual matrix is lacking, the disallowance to the extent of 10% of dividend income was not permissible. When it transpires from record that the assessee's own funds were at higher, then the investment made by it and with nothing to indicate that the borrowed funds were utilised for the purpose of investment in shares and for earning dividends, the Tribunal committed no error in disallowing the sum of ₹ 1,14,43,040/-. As far as other administrative expenses are concerned, the Revenue had requested to restore the matter back to the Assessing Officer. However, to put an end to the entire dispute with regard to other expenses, the assessee permitted disallowance of ₹ 5 lakh. The Tribunal considering the volume and quantum of investment disallowed the said amount of ₹ 5 lakh, which though is on estimated basis, it is a reasonable base and, therefore, the first question merits no consideration. Allowance of Corporate Debt Restructuring expenses - Held that:- Once the expenditure is held to be revenue in nature incurred wholly and exclusively for the purpose of business, it can be allowed in its entirety in the year in which it is incurred. However, considering the the decision in the case of Madras Industrial Investment Corporation Ltd. (1997 (4) TMI 5 - SUPREME Court ), when the spreading is done for over a period of six years and as the assessee-respondent has no objection to such revenue expenditure being spread out, though it could have insisted for this amount allowed in the year under consideration, with no such objection having been raised, the Revenue would not succeed in this issue as the expenditure is held to be revenue in nature. Waver of principal amount of loan - Held that:- Amount of loan waived by the Financial Institution cannot be brought to tax as appellant's income u/s.28(iv) and/or sec.41(1) of I.T. Act. Addition is deleted Addition under Section 115JB being the expenditure estimated on earning of dividend income under Section 14A - Held that:- The addition under Section 115JB of the Act of a sum of ₹ 1,14,43,040/- when was made as an expenditure estimated on earning of dividend income under Section 14A of the Act, without reiterating the rationale of confirming deletion of such amount as has been elaborately done at the time of deciding question No.1, this deletion requires to be confirmed.
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